Moroccan Tax Authority Scrutinizes Suspicious Company Relocations

It all started with the requests for transfer of the registered office filed with the central control services of the Directorate General of Taxes (DGI) by several small and medium-sized enterprises operating mainly in the construction, public works, catering and IT sectors, who decided to migrate from the regions of Souss-Massa, Drâa-Tafilalet, the Oriental and Tanger-Tétouan-Al Hoceïma to the Rabat-Casablanca axis. The DGI has tasked the regional control teams with verifying and auditing the tax situation of these companies.

The audit operations revealed irregularities and contradictions in the income and expenses, as well as chronic deficit declarations incompatible with the volume of public contracts and orders that the companies concerned have benefited from, report sources to Hespress. These companies had to explain the requests for transfer of their registered office, citing a decrease in business opportunities and a concentration of projects mainly on the Rabat-Casablanca axis, while they had accepted all the conditions stipulated in the specifications without any reservations, particularly concerning the additional costs related to the displacement.

Furthermore, the provisions of Article 149 of the General Tax Code require establishments subject to this obligation, whether or not they are liable, to inform the tax administration of any transfer of their registered office, their main establishment or their main establishment located in Morocco, and of any change in the location of this main establishment or registered office, by registered letter with acknowledgment of receipt, or direct delivery against receipt, or by filing a declaration according to a standard model drawn up by the administration, and this within a maximum period of 30 days.

The tax inspectors also discovered that the companies concerned rely on small companies owned by relatives, acquaintances or self-employed workers to carry out public contracts and orders in regions far from where their registered offices are located. Several companies have opted for the solution of transferring their registered office to circumvent these difficulties, added the same sources.